Summary
Salesforce closed fiscal 2021 with strong fourth-quarter growth. Revenue for the quarter ended January 31, 2021 was $5.82 billion, up 19.9% from the prior-year quarter, while full-year revenue reached $21.25 billion, up 24.3%. Gross profit for the quarter was $4.34 billion, up 19.5%, and gross margin was 74.6%, down 0.3 percentage points. Operating income was $193 million, and operating margin was 3.3%, up 4.1 percentage points. Net income was $267 million. For the full year, net income was $4.07 billion, up 3131.7%, full-year gross margin was 74.4%, down 0.8 percentage points, and full-year operating margin was 2.1%, up 0.4 percentage points. GAAP diluted earnings per share was $4.38, up from the prior year. Non-GAAP operating margin was 17.5% for the quarter and 17.7% for the full year. Non-GAAP diluted earnings per share was $1.04 for the quarter and $4.92 for the full year.
Cash generation and backlog expanded. Operating cash flow was $2.17 billion for the quarter, up 33.2%, and $4.80 billion for the full year, up 10.9%. Capital expenditures were $149 million for the quarter, up 9.6%, and $710 million for the full year, up 10.4%. Free cash flow, a non-GAAP measure, was $2.03 billion for the quarter and $4.09 billion for the full year. Deferred revenue was $12.61 billion, up 18.2%. Remaining performance obligation was $36.10 billion, up 17.2%, and current remaining performance obligation was approximately $18.0 billion, up 20%, or 18% in constant currency.
Guidance points to continued growth. Management raised its full-year fiscal 2022 revenue outlook to $25.65 billion to $25.75 billion, up 21%, and set first-quarter fiscal 2022 revenue guidance at $5.875 billion to $5.885 billion, up approximately 21% year-over-year. The full-year revenue outlook includes about $600 million from Slack Technologies, net of purchase accounting, and assumes a closing date in late second quarter. Salesforce initiated first-quarter non-GAAP earnings per share guidance of $0.88 to $0.89 and full-year non-GAAP earnings per share guidance of $3.39 to $3.41. It also initiated full-year non-GAAP operating margin guidance of 17.7% and first-quarter current remaining performance obligation growth guidance of 19%. Full-year operating cash flow growth guidance is 10% to 11%.
Operational momentum was broad. Salesforce said new business grew during the remainder of fiscal 2021 at rates consistent with historical trends prior to COVID-19 after a slight decline in the first quarter. The company continued to invest in growth levers such as multi-cloud adoption, enterprise and international customers, and industry-specific solutions. It launched Work.com for reopening safely, Work.com for schools, and Vaccine Cloud. Attrition, excluding the Integration service offering, Salesforce.org, and Tableau, was between 9.0% and 9.5% as of January 31, 2021. Headcount was 56,606 full-time equivalent employees, up from 49,703 a year earlier. The company also said customers with many of these characteristics have lower attrition rates than the company average. It expanded leave programs and provided regular communication to employees during the pandemic.
Risks remain. The COVID-19 pandemic continues to create uncertainty, and Salesforce recorded approximately $184 million of impairments in the fourth quarter and $216 million for the fiscal year tied to real estate leases it exited. More impairments are possible. The pending Slack acquisition, estimated at $15.6 billion in cash and 45 million shares, brings integration, financing, and regulatory approval risks. The company reduced commitments under its bridge loan facility to $4.0 billion in February 2021 and entered a $3.0 billion acquisition term loan. Foreign currency fluctuations had a modest favorable impact on revenue and remaining performance obligation, and they are expected to continue. Attrition could increase, and sales cycles remain less predictable. The company also faces data privacy, security, and litigation risks, including litigation involving acquired entities such as Tableau. The company said the ultimate extent of the pandemic's impact on its financial condition and results of operations is uncertain.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2021 | Q3 FY2021 | QoQ | Q4 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $5.82B | $5.42B | +7.3% | $4.85B | +19.9% |
| Gross profit | $4.34B | $4.03B | +7.8% | $3.63B | +19.5% |
| Gross margin | 74.6% | 74.3% | +0.3 pp | 74.8% | -0.3 pp |
| Research & development | $939.0M | $902.0M | +4.1% | $831.0M | +13.0% |
| Sales & marketing | $2.63B | $2.38B | +10.7% | $2.35B | +12.2% |
| General & administrative | $574.0M | $522.0M | +10.0% | $490.0M | +17.1% |
| Total operating expenses | $4.14B | $3.80B | +9.1% | $3.67B | +13.0% |
| Operating income (loss) | $193.0M | $224.0M | -13.8% | -$36.0M | +636.1% |
| Operating margin | 3.3% | 4.1% | -0.8 pp | -0.7% | +4.1 pp |
| Net income (loss) | $267.0M | $1.08B | -75.3% | -$248.0M | +207.7% |
| Net margin | 4.6% | 19.9% | -15.4 pp | -5.1% | +9.7 pp |
| Diluted EPS | $0.29 | $1.15 | -$0.86 | -$0.29 | +$0.58 |
Risks
The pending acquisition of Slack Technologies is expected to close in the second quarter of fiscal 2022 for an estimated $15.6 billion in cash and 45 million shares, but completion depends on antitrust clearances and the DOJ issued a Second Request on February 16, 2021. A delay or failure to close could postpone expected benefits and add transaction costs.
In connection with the Slack acquisition, Salesforce obtained a Bridge Facility originally $10.0 billion, reduced to $7.0 billion in December 2020 and further to $4.0 billion in February 2021, plus a $3.0 billion Acquisition Term Loan. The risk factors state debt service obligations may impair financial condition and cash flows, and MD&A expects interest expense to increase upon closing.
COVID-19 materially affected operations, results and cash flows; fiscal 2021 operating cash flow was negatively impacted by changed billing frequency and go-to-market investments. MD&A also notes the pandemic caused incremental operating expenses and lower than expected operating cash flows for fiscal 2021 compared with historical trends.
Salesforce recorded approximately $216 million of impairments to assets associated with real estate leases in select locations it decided to exit, including approximately $184 million in the fourth quarter of fiscal 2021. It may record additional impairments as it continues to evaluate office space needs.
Fiscal 2021 results benefited from net gains on strategic investments of $2.17 billion, including a $1.7 billion unrealized gain from IPOs of two strategic investments. The risk factors note that a ten percent decrease in enterprise value of the largest privately held equity securities held as of January 31, 2021 could reduce the portfolio by $66 million.
Fiscal 2021 net income included an approximately $2.0 billion one-time discrete tax benefit from recognition of deferred tax assets related to an intra-entity transfer of intangible property. The benefit depends on complex valuation assumptions and may not recur, while future realization depends on sufficient taxable income.
As of January 31, 2021, the attrition rate excluding the Integration service offering, Salesforce.org and Tableau was between 9.0% and 9.5%. The company expects it to remain consistent or slightly better in the near term but says it may increase over time, including as a result of COVID-19.
Sales efforts increasingly target larger enterprise and governmental customers, which may require longer, more expensive sales cycles, greater configuration and implementation work, and pricing pressure. COVID-19 restrictions have disrupted operations and may continue to adversely affect sales efforts and delay revenue recognition.
The company depends on key management and technical personnel; Keith Block resigned as co-CEO in February 2020 and Mark Hawkins resigned as President and Chief Financial Officer in February 2021. Competition for engineers, sales executives and operations personnel may make retention and recruitment difficult.
Periodic changes and adjustments to the sales organization have in some periods resulted in reduced productivity and may negatively impact the rate of growth and operating results. MD&A notes such changes could again cause temporary disruptions to sales productivity.
The company faces evolving privacy laws including the California Privacy Rights Act, California Consumer Privacy Act and EU General Data Protection Regulation, plus industry-specific rules and social and ethical issues arising from use of AI in its offerings. Noncompliance could increase costs and limit service delivery.
The company must continuously enhance its artificial intelligence offerings and keep pace with rapid technological developments, including Hyperforce and newer offerings such as Customer 360 Truth and Work.com. Failure to do so may reduce revenue growth and harm its competitive position.
SaaS KPIs
All quarters →Free cash flow
Non-GAAP operating margin
Billings and other
Current Remaining Performance Obligation
Remaining Performance Obligation
Summary, forecast, risks and KPIs are extracted from Salesforce, Inc.'s SEC filings for Q4 FY2021 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.